Correlation Between Healthcare and HUMANA
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By analyzing existing cross correlation between Healthcare AI Acquisition and HUMANA INC, you can compare the effects of market volatilities on Healthcare and HUMANA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Healthcare with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and HUMANA.
Diversification Opportunities for Healthcare and HUMANA
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Healthcare and HUMANA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare AI Acquisition and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Healthcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Healthcare AI Acquisition are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Healthcare i.e., Healthcare and HUMANA go up and down completely randomly.
Pair Corralation between Healthcare and HUMANA
Assuming the 90 days horizon Healthcare AI Acquisition is expected to generate 1.38 times more return on investment than HUMANA. However, Healthcare is 1.38 times more volatile than HUMANA INC. It trades about 0.04 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.18 per unit of risk. If you would invest 1,121 in Healthcare AI Acquisition on September 12, 2024 and sell it today you would earn a total of 29.00 from holding Healthcare AI Acquisition or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Healthcare AI Acquisition vs. HUMANA INC
Performance |
| Timeline |
| Healthcare AI Acquisition |
| HUMANA INC |
Healthcare and HUMANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and HUMANA
The main advantage of trading using opposite Healthcare and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare position performs unexpectedly, HUMANA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HUMANA will offset losses from the drop in HUMANA's long position.The idea behind Healthcare AI Acquisition and HUMANA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| HUMANA vs. Morgan Stanley | HUMANA vs. Infosys Ltd ADR | HUMANA vs. Citizens Bancorp Investment | HUMANA vs. Small Cap Premium |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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